A Next Step Toward Universal Health Care: Medicaid For More

Harold Pollack provides an important insight into differences between the liberal incrementalists and transformationalists when it comes to the next steps on health care reform.

Given the ill-will and recrimination, it’s easy to forget that this is a fight among friends and allies about how best to pursue shared goals and values. Much of the internal Democratic Party debate confuses instrumental operational questions with questions of core principle. By which I mean, to put it more simply: Single payer is not, in itself, a principle. It is one way to organize health-care financing. A regulated patchwork of private insurers undergirded by public subsidies and the individual mandate is another. In other words, these arrangements are means to an end, not ends themselves. After all, most American progressives would be thrilled to see the Dutch or German health-care systems enacted here, though neither of these is actually single payer in the sense that Medicare is.

The end—the core principle at stake—is universality. A wealthy and humane democracy must provide decent health coverage to everyone—coverage that actually works to prevent and treat serious illness, injury, and disability. On this principle, progressives are in total agreement. We’re no longer debating the goal of universal coverage. We’re debating how to get there. And it’s important to remember that.

Starting with agreement on universality as the goal opens up a host of possible paths to get there, with single payer being one of them. Another possibility was articulated very well by Michael Sparer, who proposes “Medicaid for more” as a next step. I’d like to bullet point some of his arguments.

Medicaid has consistently been expanded from the 1970’s when it served 18-20 million people to now covering 70 million. That amounts to one in five Americans and one in three children in this country.

Medicaid has more generous coverage than Medicare, with few copayments and no deductibles. Because of that, unlike Medicare, Medicaid beneficiaries don’t need to purchase supplemental private plans.

As we have recently witnessed with efforts to repeal Obamacare, Medicaid has grown so large and successful that Republicans didn’t dare cut it back.

On a per-patient basis, Medicaid is a low-cost program, providing coverage to millions of the nation’s oldest, sickest, and most vulnerable populations for roughly 25 percent less than employer-sponsored private insurance.

More than 60 percent of Medicaid’s beneficiaries are enrolled in private managed care plans, with the government paying the plans for each beneficiary they sign up.

States are experimenting with novel approaches to managing the care of particularly hard-to-serve populations, such as the homeless, substance abusers, or emergency room “frequent fliers.”

Medicaid can also play an important role in stabilizing the exchanges. Medicaid managed care could serve as a public insurance safety net in markets lacking adequate private competition.

There already is a Medicaid buy-in model: More than 40 states successfully allow the disabled to buy into the program.

Those are all very compelling arguments. But here’s the hidden kicker:

Perhaps most crucially, individual states are already free to adopt a Medicaid buy-in approach, so long as they get federal permission to do so. And several state legislatures are considering exploring the Medicaid buy-in strategy. There is no need to wait for a Democratic takeover of the presidency and Congress — both of which are necessary ingredients of a federal Medicare expansion.

We’ve already seen the Nevada legislature pass a bill to allow Medicaid buy-in, only to be vetoed by the Republican governor. Sparer points out that both Massachusetts and Minnesota are currently exploring the idea.

There are, of course, some problems that arise with a “Medicaid for more” approach. The most obvious is that the reason the program is able to keep costs down is because reimbursement to providers is lower than private insurance as well as Medicare. The up side to that challenge is that any improvement from our current health care system is going to have to grapple with methods of cost control. Adjusting Medicaid reimbursements upward seems to be a much easier lift than the alternative. As Sparer says, “While some provider complaints about inadequate reimbursement are legitimate, we should be at least as concerned with the high price paid by private insurers as with the low price paid by Medicaid.”

As someone who spent a couple of years being covered by Medicaid, I can say without equivocation that it was the best health insurance I’ve ever had. I now purchase a private plan on the exchanges and would appreciate a public option such as Medicaid to compare with my current coverage. Especially for states where the private options are slim to none, including Medicaid buy-in as a choice seems like a no-brainer. The fact that it wouldn’t require a majority in the House, sixty Senators and a president willing to sign off on it means that it is low-hanging fruit simply waiting to be harvested. That is what makes “Medicaid for more” the next logical step towards reaching the goal of universal coverage.